Hilsenrath suggests that public and private conversations between Fed members have turned increasingly towards more easing measures.

From his report:

Amid the recent wave of disappointing economic news, conversation inside the Fed has turned more intensely toward the questions of how and when to move. Central-bank officials could take new steps at their meeting next week, July 31 and Aug. 1, though they might wait until their September meeting to accumulate more information on the pace of growth and job gains before deciding whether to act.

Three policy options appear to be under consideration right now: purchases of bonds (some kind of quantitative easing policy), further transparency on rate projections, and cutting the reserve rate (or, the interest rate paid on money banks hold at the Fed).

The big question, Hilsenrath suggests, is when and not if. There are various reasons why the Fed might use its September decision rather than its August decision to initiate new easing measures:

By then they will have seen two more monthly unemployment reports and two more months of data on output, spending and investment. Fed officials update their economic projections at the September meeting and Mr. Bernanke holds his a quarterly news conference after, which would give him an opportunity to publicly explain the Fed's thinking.

Moreover, some officials believe the Fed's June decision to continue a program known as "Operation Twist" through year-end could help the economy and want to give it time to work. Under that program, the Fed is buying $267 billion worth of long-term Treasury securities and selling an equal amount of short-term securities in an attempt to push down long-term interest rates to spur spending and investment.

While Hilsenrath may be the most influential reporter covering the Federal Reserve right now, it is worth taking these reports with a grain of salt. Other such reports have generated massive enthusiasm before, only to see that enthusiasm expire when the Fed failed to live up to expectations.

That said, statements from Bernanke and other Fed members have indeed appeared to favor more action in the near-term, although August 1 may be an over-zealous hope. That said, it is unclear whether the actions being considered right now will truly be effective at restoring confidence in markets, particularly markets that are highly influenced by foreign financial stress.